Indonesia's nickel industry faces mounting scrutiny after being flagged by US authorities for forced labour, a designation analysts say should serve as a "wake-up call" to Jakarta as it attempts to secure a critical mineral deal with Washington.

The US Department of Labour's latest report on the "Global State of Child and Forced Labour" classified Indonesian nickel as a product of exploitative practices, citing various news reports and research from non-governmental organisations.

Labour and environmental activists have criticised Chinese-owned nickel smelters in Indonesia for poor health and safety standards, [...]workers had filed numerous complaints but received few responses.

[An advocate claims]"the listing of Indonesian nickel as a product derived from forced labour ... provides hope for improved conditions for well over 200,000 workers in the sector," [...] "An end to the sector's long history of inexplicably lax regulation is, in fact, beneficial for all involved."

Indonesia will improve supervision of its commodities sector after the U.S. Department of Labor said there was forced labour in the country's nickel industry, a senior manpower ministry official said.

The Chinese embassy in Jakarta did not immediately respond to a request for comment on the contents of the U.S. report.